Proposed bill will turn video business upside down

Sen. Jay Rockefeller is planning a bill that aims to give upstart video services the chance to compete on an equal footing with classic MVPDs by guaranteeing their rights to content provided by pay TV networks and channels.

Rockefeller's bill, The Consumer Choice in Online Video Act, would afford companies like Netflix, Sony, and any other non-traditional competitor the same rights to programming provided cable companies under the 1992 Cable Act. (The text of the bill was still not published at the time this was written.)

Rockefeller’s bill is a response to complaints that entrenched multichannel video programming distributors (MVPDs), including cable MSOs, satellite broadcasters, and IPTV companies, cut deals with content owners that include exclusivity for themselves – shutting out new competitors from access.

These complaints appear to have been given some substance by the cable industry. Earlier this year, DSL Reports quoted Time Warner Cable chairman Glenn Britt saying: “"It is absurd to suggest that, in today’s highly competitive video marketplace, obtaining some level of exclusivity is anticompetitive. Exclusivities and windows are extremely common in the entertainment industry; that’s exactly how entertainment companies compete. This is why, for example, you can only watch Fast and Furious 6 in a movie theater (not in your living room), Sunday Ticket on DirecTV, and the new Arrested Development episodes on Netflix. In fact, the amount and scope of exclusivity and windowing in Time Warner Cable’s arrangements with programmers pales by comparison to that found between other players in the entertainment ecosystem."

Rockefeller expects the provisions in his proposed legislation might lead to a la carte, a notion that fellow Sen. John McCain has been advocating for. The language on that subject in the Senator’s announcement is somewhat provisional. Referring to the pending bill, it says, “It also explores ways for online video distributors to negotiate to carry broadcast television content and facilitate greater consumer choice in programming.”

The announcement also said: "We have all heard the familiar complaint that we have five hundred channels, but there is nothing to watch," Rockefeller said in a statement. "My legislation aims to enable the ultimate a la carte -- to give consumers the ability to watch the programming they want to watch, when they want to watch it, how they want to watch it, and pay for only what they actually watch."

The bill alludes to the issue of broadband consumption caps, proposing truth-in-billing protections so that subscribers would be able to clearly understand what broadband service tier is appropriate for their usage.

The American Cable Association approved the goals in the bill. ACA president and CEO Matthew M. Polka said, “ACA shares the Chairman’s concerns, as reflected in his bill, about the ease with which certain existing players in the market can use their market power to harm consumers and impede competition. This is a significant concern for small cable operators and reflects the need to consider a new approach. We look forward to working with the Chairman on these issues.”